The Four Pillars of Cyber Risk Management

Your organization is a castle, and in this modern age, cyber threats are the besieging army at your gates. The ladders are up, the catapults are drawn back, and a breach is only a matter of time. Sounds dramatic? Maybe, but the world of cybersecurity is a high-stakes game that commands the same level of strategy, preparedness, and maneuverability as any battlefield. A single slip-up can throw open the gates and lead to chaos, data breaches, tarnished reputations, and lost revenue.

So, how do you fortify your digital stronghold? In this post, we arm you with four strategies to handle cyber risk: Risk Reduction, Risk Elimination, Risk Transfer, and Risk Acceptance. But beware; we’ll also reveal the one fatal risk “strategy” that you may be unknowingly using in your organization: Ignoring the Risk.

1) Risk Reduction

Risk reduction involves adding protective layers or changing the current functionality in order to minimize the impact of a vulnerability without completely eradicating it. This is like adding multiple locked doors between the outer walls of your castle and the treasury or changing the type of locks used to a more secure lock. While burglars may break through one or two barriers, each added layer decreases the likelihood of them reaching the core.

Example:

Let’s say you discovered a Cross-Site Scripting (XSS) vulnerability in your web app. Implementing a Web Application Firewall (WAF) is a prime example of risk reduction in the realm of web applications. A WAF filters and monitors HTTP/HTTPS traffic between a web application and the Internet, thus mitigating attacks like SQL injection, Cross-Site Scripting (XSS), and more. There is no guarantee that attackers cannot come up with WAF bypassing method and exploit the website.
Another example is developing or improving your input validation mechanism to prevent this XSS from occurring. You are effectively reducing the risk of XSS, but you are by no means making it impossible to find other XSS vulnerabilities or variants.

In actuality, risk reduction is the strategy most often chosen by security teams as its often the most practical and has the highest return on invest.

2) Risk Elimination

Risk elimination is the equivalent of removing the bridge that leads to your castle entirely or moving the treasury to another castle entirley. It’s the process of completely removing a vulnerability so that it poses no risk. This often comes at the expense of shutting down a service or making substantial changes to your operational landscape. This approach is often the most effective but can be expensive or impractical.

Example

If you have a feature in your web application that is riddled with vulnerabilities and isn’t essential for business operations, disabling that feature altogether eliminates the associated risks.

Another example – Suppose your web application has an older authentication mechanism, such as Basic Authentication, that transmits usernames and passwords in an easily decodable format. This presents a significant security risk, especially if the data is intercepted during transmission.

In this case, the risk elimination strategy would be to remove Basic Authentication entirely and replace it with a more secure authentication mechanism, like OAuth 2.0 or JWT (JSON Web Tokens), which offer better encryption and more secure token-based methods for verifying users. By doing so, you’ve eliminated the risk associated with the weaker, outdated authentication method.

In essence, risk elimination in this scenario would mean phasing out the older, insecure method and implementing a newer, secure one, thereby entirely removing the vulnerability associated with the old approach. Note that we didn’t not eliminate the risk for password leakage altogether, since modern authentication mechanisms also have vulnerabilities, but you have eliminated the risk of an eavesdropper stealing credentials by reading the basic authentication header.

3) Transferring the Risk to a Third Party

Sometimes, the best defense is to let someone else be the shield. Transferring the risk involves offloading the responsibility of a potential risk to a third-party . This is akin to hiring mercenaries to defend your castle – while the risk still exists, the job of managing it lies with someone else.

Examples

Outsourcing the payment gateway of your web application to a third-party service like Stripe or PayPal is an example of risk transfer. By doing so, you are transferring the security risks associated with payment processing to experts in that field.

Another interesting risk transfer is buying cyber security insurance. By buying insurance that covers damages in case of a breach, organizations can transfer some of the financial risk to the insurance company.

4) Risk Acceptance

Accepting the risk is a strategic choice, often mistaken for inaction or neglect. However, nothing could be further from the truth. In reality, accepting a risk is a calculated decision made after thorough analysis. It’s akin to a seasoned general consciously choosing not to fortify a particular section of a castle wall, fully aware of the reasons and potential consequences.

For organizations, accepting a risk should be the outcome of a thoughtful process. This involves fully understanding the nature and extent of the vulnerability, gauging its potential impact, and conducting a cost-benefit analysis. The goal is to determine whether the resources required for mitigation outweigh the actual cost of the potential impact.

Example

Suppose your web application has an Open Redirect vulnerability, a flaw that allows attackers to redirect users to malicious websites using your application’s own redirection mechanisms. While it is a security concern, Open Redirect vulnerabilities are generally considered lower in severity compared to other vulnerabilities like SQL Injection or Cross-Site Scripting (XSS). After this rigorous evaluation, the organization decides to accept the risk of keeping the Open Redirect vulnerability unaddressed. The rationale could be that the potential harm caused by the vulnerability is low in comparison to the resources required for its remediation.

Ignore the Risk

Ignoring a risk in the cybersecurity landscape is akin to a soldier tasked with guarding a castle gate who notices a small hole in the wall but chooses not to report it. It may seem inconsequential at first, a minor flaw that couldn’t possibly bring down an entire fortress. However, what starts as a small hole can become a breach point for attackers, offering them a way in that goes unnoticed until it’s too late.

Ignoring risks in cybersecurity doesn’t make them disappear; it offers them room to grow into significant threats. It’s like allowing that small hole in the castle wall to widen over time, eventually becoming large enough for invaders to crawl through. The initial oversight by the soldier creates a ripple effect that can jeopardize the entire defense structure, making the fortress vulnerable to an attack that could have been easily prevented had the issue been reported and addressed promptly.

Example

Ignoring routine updates or patches for your web application can lead to outdated security measures, making the system vulnerable to known exploits that these updates would have otherwise fixed. It’s akin to the soldier who ignored the hole; both scenarios involve neglecting a seemingly minor issue that can escalate into a major problem. Over time, the unpatched vulnerabilities become a vector for attackers to exploit and perhaps chain several low severity vulnerabilities to compromise your system, data, and customer information.

Ignoring risks is not an option; it’s a shortcut to failure. Always be vigilant, assess the threats, and act accordingly to fortify your digital environment.

Conclusion

Defending your cybersecurity castle is no simple feat, but it becomes manageable when approached strategically. Understanding the essence of each risk mitigation technique – be it reducing, eliminating, transferring, or even thoughtfully accepting risks, enables organizations to deploy their defenses more thoughtfully and well… strategically. However, turning a blind eye to vulnerabilities is akin to the negligent soldier overlooking a hole in the fortress wall – a seemingly inconsequential decision that can lead to serious consequences.